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CDFI certified credit unions will be able to take part in newly unveiled initiative, a move supported by CUNA and NAFCU.
The EPA has rejected the creation of a single “green bank” to administer funds from the new Greenhouse Gas Reduction Fund—a decision that will allow participation by CDFI credit unions.
The agency on Tuesday announced the structure of the new program—a $20 billion General and Low-Income Assistance Competition and a $7 billion Zero-Emissions Technology Fund Competition.
“EPA’s Greenhouse Gas Reduction Fund will include a nearly $20 billion General and Low-Income Assistance Competition to award competitive grants to eligible nonprofit entities that will collaborate with community financing institutions like green banks, community development financial institutions, credit unions, housing finance agencies and others,” the agency said, in announcing its plans.
Credit Union Groups in Support
Some lawmakers and interest groups had urged the EPA to create a single national green bank to administer funding for the two programs. In announcing the structure of the program, the EPA rejected that idea, a decision that was applauded by NAFCU.
“NAFCU has been a leading advocate for a commonsense interpretation of the text of the Inflation Reduction Act to establish an efficient and effective framework that will leverage the strengths of experienced community-based lenders, especially those in low-income and disadvantaged communities, and swiftly and more pragmatically deploy monies from the Fund to reduce greenhouse gas emissions and other air pollutants,” Ann Petros, the organization’s vice president of regulatory affairs, said Tuesday.
Officials at CUNA were likewise pleased with the decision, with President/CEO Jim Nussle saying, “As recognized by the EPA in the announcement, credit unions and CDFIs are best positioned to deliver funding to the low-income and disadvantaged communities which Congress intended to benefit with the creation of the Greenhouse Gas Reduction Fund."
Pushback from Politicians, Non-Profit Group
Other groups, such as the non-profit Coalition for Green Capital, had been pushing for the establishment of the single national green bank to administer the funds.
They were joined by several Democrats who had been advocating for the creation of such a bank—Sens. Chris Van Hollen of Maryland, Edward Markey of Massachusetts, and Rep. Debbie Dingell of Michigan.
“An effective national climate bank program will build generational climate-friendly wealth in communities that have the least access to clean energy capital and are most at risk from environmental harm,” they wrote in a letter to the EPA.
More Credit Union Support
Groups such as the African-American Credit Union Coalition disagreed.
“Concentrating all resources into a single national green bank runs a high risk of excluding community development and green finance intermediates and increases the risk that funds will not be deployed on a timely basis and to the populations, the [program] is designed to serve,” the coalition said when the EPA solicited comment on the program last year.
NAFCU also noted in their own comment letter that credit unions are subject to regulation by the NCUA, and/or state regulators, as well as the CFPB.
“Credit unions are generally risk-averse institutions that pride themselves on working through a relationship banking model that always puts consumers’ interests first,” the trade group wrote.
CDFI Fund
